Americans Aged 45-54 Have Highest Credit Card Debts

Americans Aged 45-54 Have Highest Credit Card Debts

Credit card debt and high interest rates underestimated by this age group

Young people are often criticized for their reckless spending and lack of savings. However, it's actually 45-54-year-olds who have the highest levels of dangerous debt, according to new research.

Data from ValuePenguin shows that middle-aged Americans typically have the highest credit card debt of all age groups, with the average individual owing over $9,000. This puts the age group over $3,000 more in debt than the average millennial (the generation below), the report found.

This may seem surprising with older people likely to earn more than their younger counterparts. The report suggests that this factor could be leading to higher debt with older people more likely to feel they can spend more and pay off balances with ease, even if their optimism proves wrong.

Credit card debt can be the most dangerous kind of borrowing. Mortgages and student loans can often be paid flexibly, and are not generally subject to rising interest rates, thanks to levels locked in from the original loan date.

In contrast to credit cards, mortgage debt is considered to be "good debt", because the value of a home generally increases over time and banks usually offer low interest rates to borrowers. Mortgage loans can also be re-negotiated, or fixed for a set period of time, avoiding spiralling charges.

Credit card debt is another story. With its high interest rates and the risk of steep charges for default on payments, borrowers may pay back far more than they were loaned.

Generally, advice is that credit cards should only be used for non-essentials, never for regular needs, such as groceries or energy bills. The minimum payment should be paid without fail each month, and, if possible, the entire balance cleared every month.